Oil Prices Reverse from Earlier Gains

Oil prices fell nearly 2 percent on Friday but were on track for weekly gains after financial markets strengthened on hopes the United States and China may soon resolve their trade dispute.

Tightened supply following OPEC-led crude production cuts aided earlier 1 percent increases for both oil benchmarks, but concerns about the global economy kept markets in check.

International Brent crude futures LCOc1 were at $60.55 per barrel at 1440 GMT, down $1.13, or 1.83 percent. U.S. West Texas Intermediate (WTI) crude futures CLc1 fell 87 cents to $51.72 per barrel.

WTI and Brent are set for their second week of gains, rising nearly 8 percent and 6 percent respectively.

“Profit-taking has weighed on oil prices in today’s trading session following gains made earlier in the week,” said Abhishek Kumar, senior energy analyst at Interfax Energy in London.

“A lack of tangible progress in the U.S.-China trade talks, ongoing political uncertainty in the U.S., and fears that China’s weakening economy could adversely hit global oil demand have also contributed toward the weakness in oil prices.”

Markets had been supported by hopes that an all-out trade war between Washington and Beijing might be averted. Three days of talks concluded this week with no concrete announcements, but higher-level talks may convene later this month.

However, markets remain concerned by mounting signs that China’s growth in 2018 and 2019 will be the lowest since 1990.

Most analysts have downgraded their global economic growth forecasts below 3 percent for 2019, with some fearing a recession amid trade disputes and spiraling debt.

“If we experience an economic slowdown, crude will underperform due to its correlation to growth,” said Hue Frame, portfolio manager at Frame Funds in Sydney.

You may also like

BizQuote Of The Day

Look well to this day. Yesterday is but a dream and tomorrow is only a vision. But today well lived makes every yesterday a dream of happiness and every tomorrow a vision of hope. Look well therefore to this day.~Francis Gray